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Penang Chinese Chamber of Commerce expresses concerns over PDC’s land sale to Umech Land at undervalued price

Publish date: Tue, 03 Oct 2023, 05:29 PM

KUALA LUMPUR (Oct 3): The Penang Chinese Chamber of Commerce (PCCC) has raised concerns over the Penang Development Corp (PDC)’s decision to sell 558.96 acres of land in Batu Kawan Industrial Park 2 (BKIP2) to Umech Land Sdn Bhd for RM646.02 million, which the chamber of commerce claims significantly undervalues the market rate.

On Sept 27, Sunway Bhd through a statement, announced that its 70% owned subsidiary, Umech Land Sdn Bhd, had entered into a joint development agreement with PDC to develop a 559-acre prime industrial land in Batu Kawan, Penang, in exchange for a land entitlement of RM646.02 million.

PDC will receive a land entitlement that consists of a RM64.6 million deposit, with the remaining RM581.42 million to be paid via four installments. Both parties will collaborate on the development of the land, which will be known as “Batu Kawan Industrial Park 2”.

Buying a property is not an easy task, especially for first-time homebuyers. To address this issue, UDA Holdings Berhad (UDA) has brought back UDA Ria Property Campaign for its second instalment with the participation of nine UDA projects. 

PCCC president Datuk Seri Hong Yeam Wah expressed concern about the fact that the industrial land in BKIP2 is made available on the open market in May for RM80 per square foot, with parcels as small as five acres each.

In this regard, he questioned whether the selling price of RM26.53 per square foot by PDC to Umech Land is reasonable and whether the four-year payment term for land sales is appropriate.

“Why was 558.96 acres of valuable industrial land sold to a private company without an open tender? When large tracts of industrial land are sold to private developers, has there been any research into the feasibility and rationality of the projects?” he said during a press conference on Tuesday.

Also present was PCCC life honorary president Tan Sri Tan Kok Ping.

Hong pointed out that in the past, PDC controlled the sale of industrial land, and interested parties had to apply directly to PDC and go through a rigorous review process by PDC and Invest Penang.

“However, the industrial sites in BKIP2 are now being sold on the open market through intermediaries. This raises our concerns, particularly considering the current scarcity of industrial land in Penang,” he stated.

Hong also raised concerns about PDC’s practice of compulsorily acquiring private land through the Land Acquisition Act and then selling it to private developers for development. He suggested that this practice could be legally challenged by the original landowners.

“PDC, as the official agency of the state government, has a clear mission to make Penang a better place through sustainable socio-economic development. It should aspire for its development plans to serve as models for Penang and its people. If that’s the case, why is PDC unwilling to continue developing this industrial land?” he added.

Meanwhile, Hong also questioned if changes in Umech Land’s ownership were reported to relevant authorities in advance as required.

He said Penang Chief Minister Chow Kon Yeow, who is also the chairman of PDC, replied to a letter from PCCC on Aug 25, stating that Umech Construction Sdn Bhd first expressed interest in the industrial development project at Expo Dubai 2020, citing financial support from Dubai.

However, it turns out that Sunway Group provided funding and according to information from the Companies Commission of Malaysia (SSM), Sunway Group held a 70% equity stake in Umech Land as at Sept 25, 2023, Hong said.

In light of this, Hong asked whether Umech Construction Sdn Bhd, the original buyer, and the entity that signed the contract with PDC on Sept 27, were still the same major shareholder, or if there had been changes in ownership that resulted in financial gain.

Similarly, Tan emphasised that for government-awarded projects, changes in a company’s shareholders or equity must be reported to relevant authorities in advance, and can only be implemented after approval.

“However, these processes appeared to have been bypassed. On the contrary, we directly learned about such equity changes in the news report,” Tan said.

Tan also expressed doubts about Umech Land’s financial capability to undertake such a significant industrial development, as a quick check by the chamber of commerce on CTOS (a leading credit reporting agency in Malaysia) revealed multiple liabilities for Umech Land on the relevant date.

In this regard, Tan called on Chow to come forward and provide a public explanation for the matter and address suspicions surrounding the transaction.

At the same time, we also specifically request the Penang state government to reorganise the top management of the PDC to save the bureaucracy within the PDC, which has become entrenched and has become a habit, resulting in various malpractices that endanger the well-being of the government and the people,” he added.

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It doesnt matter la...DAP is always right...kikiki

1 month ago

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